Condos

Rehabbing, Fix and Flip, Rental Properties
1

Hello all,

 I was wondering if somebody here could give me some direction in regards to condos.  Other than price, cap rate, roi, rent, utilities, condo fees, are there any other areas I should be looking at when doing my due diligence?

EX: Condo, currently rented, 2/1 rents for $900 month and tenant pays utilities. Condo fees are $125 a month. What else should I be looking at.

Thanks in advance

2

Keep it simple when you’re doing the calculations…don’t get wrapped around the axle about terms like “Cap Rate”, “ROI”, “GIM”, “Net Income”, “NOI”, etc., etc.

You need to subtract the expense from the income. Period…what is left is cashflow (hopefully positive!) and CASHFLOW IS KING in the ‘buy and hold’ world!

Income: How much is the rental income?

Expenses:

Principal & Interest
Taxes
Insurance
Condo Fee (Boooo!)
Maintenance
Management
Vacancy
Utilities (unless tenant pays)

Also, be aware that the Condo Association can make special assessments if they need to pay for a large project. Depending upon the rules of the association, it may or may not require a vote of the owners. Also, some Condos only allow a certain percentage of the units to be non-owner occupied, so make sure that there is no rules against renting out (this would be in the CC&Rs).

Keith

3

Thanks for the reply…really helped to re-focus my perspective.